Moody's Disclosures on Credit Rating of Bank of East Asia, Limited

Global Credit Research - 05 Apr 2012

Hong Kong, April 05, 2012 -- The following release represents Moody's Investors Service's summary credit
opinion on Bank of East Asia, Limited and includes certain regulatory
disclosures regarding its ratings. This release does not constitute
any change in Moody's ratings or rating rationale for Bank of East Asia,
Limited.

Moody's current ratings on Bank of East Asia, Limited are:

Senior Unsecured MTN Program (foreign currency) ratings of (P)A2

Long Term Bank Deposits (domestic and foreign currency) ratings of A2

Bank Financial Strength ratings of C-

Subordinate (foreign currency) ratings of A3

Subordinate MTN Program (foreign currency) ratings of (P)A3

Junior Subordinate (foreign currency) ratings of Baa3 (hyb)

Short Term Bank Deposits (domestic and foreign currency) ratings of P-1

RATING RATIONALE

Moody's assigns a bank financial strength rating (BFSR) of "C-"
to Bank of East Asia (BEA), which translates into a baseline credit
assessment of baa2. The rating reflects the bank's good asset quality,
sound capitalization, strong liquidity profile, and increased
geographical diversification as it expands its mainland presence.
At the same time, the rating also takes into account its below-peer
average profitability and potential risks associated with its rapid expansion
in mainland China.

Moody's believes that the probability of systemic support for BEA is high,
resulting in a three-notch lift in the local currency deposit rating
to A2/Prime-1 from the baa2 baseline credit assessment.
The potential systemic support stems from the bank's market presence
in Hong Kong as the largest independent local bank. The bank's
foreign currency deposit rating is A2/Prime-1. The foreign
currency debt ratings for dated subordinated obligations, undated
subordinated obligations, and hybrid tier-1 stapled securities
are A3, Baa3 (hyb), and Ba3 (hyb) respectively. The
outlook for all ratings is stable.

BEA's deposit and debt ratings incorporate three main elements:
(1) the bank's BFSR of C-; (2) Moody's assessment of high
probability of systemic support (a component of joint default analysis,
referred to as JDA); and (3) the seniority of its deposits and debts.

Rating Outlook

The outlook on all ratings is Stable

What Could Change the Rating - Up

- Improved profitability with returns on average risk-weighted
assets of 1.8% or above

- Demonstrated track record of good asset quality and effective
risk controls

- Severe deterioration in asset quality with impaired loan ratio
exceeding 3% and new impairment charges of more than 100 bps of
loans per annum

The methodologies used in this rating were Bank Financial Strength Ratings:
Global Methodology published in February 2007, Incorporation of
Joint-Default Analysis into Moody's Bank Ratings: Global
Methodology published in March 2012, and Moody's Guidelines for
Rating Bank Hybrid Securities and Subordinated Debt published in November
2009. Please see the Credit Policy page on www.moodys.com
for a copy of these methodologies.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued
by one of Moody's affiliates outside the EU are endorsed by Moody's
Investors Service Ltd., One Canada Square, Canary Wharf,
London E 14 5FA, UK, in accordance with Art.4 paragraph
3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies.
Further information on the EU endorsement status and on the Moody's
office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt,
this announcement provides relevant regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides relevant regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides relevant regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

The rating has been disclosed to the rated entity or its designated agent(s)
and issued with no amendment resulting from that disclosure.

Information sources used to prepare the rating are the following:
parties involved in the ratings, public information, and confidential
and proprietary Moody's Investors Service information.

Moody's considers the quality of information available on the rated
entity, obligation or credit satisfactory for the purposes of issuing
a rating.

Moody's adopts all necessary measures so that the information it
uses in assigning a rating is of sufficient quality and from sources Moody's
considers to be reliable including, when appropriate, independent
third-party sources. However, Moody's is not
an auditor and cannot in every instance independently verify or validate
information received in the rating process.

Please see the ratings disclosure page on www.moodys.com
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Please see the ratings disclosure page on www.moodys.com
for information on (A) MCO's major shareholders (above 5%)
and for (B) further information regarding certain affiliations that may
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Please see Moody's Rating Symbols and Definitions on the Rating
Process page on www.moodys.com for further information on
the meaning of each rating category and the definition of default and
recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com
for the last rating action and the rating history. The date on
which some ratings were first released goes back to a time before Moody's
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Consequently, Moody's provides a date that it believes is
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Please see www.moodys.com for any updates on changes to
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